The More You Pay, the More it's Worth

(04-10-2014)

Opinion by Dr. David Svaldi, President, Adams State University

Some respected print and online publications have recently given a lot of attention to a report from PayScale, a salary comparison website, that purports to calculate the ROI - return on investment - of a degree from more than 1,300 U.S. colleges and universities. The resulting lists of the "Best" and "Worst" colleges for one's money appeal to readers' quest for quick, information - the print version of a soundbyte.

Those lists are what sticks with readers, even though the Atlantic.com, Slate.com, and The Economist cite flaws in the report's methodology and acknowledge the complexity of determining the true value of higher education. These publications and their astute online commenters all acknowledge there's more to consider than simply dollars and cents.

What is lacking in Payscale's report, however, is sense. If its assessment of my university is any indicator, Payscale's flawed methodology proves the old adage, Garbage In, Garbage Out. As Slate.com puts it in an understatement: "To be clear, Payscale is not performing the most precise analysis imaginable."

The Chronicle of Higher Education notes: "PayScale's crowdsourced data make it hard to obtain a large-enough sample of students from smaller majors at smaller colleges. . . to allow for a meaningful comparison with graduates of similar programs at other institutions. This is just one of the difficulties in controlling postgraduate salary data for the many factors that affect a person's wages, aside from just his or her alma mater."

PayScale ranks Adams State "College" (we have been a university for two years) among those that will make you poorer. This conclusion is based on self-reported data from no more than 45 alumni, out of many thousands who have graduated from our institution over its 90 year-history.
Even a student in a first-year statistics class at Adams State University, or any other educational institution, will confirm that this does not constitute a statistically significant sample.

Adams State would probably top of the list of "Best" ROI's by simply including the salary of one of our graduates from 1951 - the man who founded E*TRADE. But PayScale relies on self reporting, doesn't take a representative sample or consider sample size, and doesn't consider those with post-graduate education, or self-employed business owners. Sample size alone should invalidate PayScale's conclusions; experts also question the way it calculates cost of attendance, and its failure to consider regional wage differences.

Even though these publications point out the study's flaws, their coverage nevertheless lends credibility to a questionable report. Sweeping judgments based on such a report can be damaging to both colleges and students. Adams State is a small, rural, Hispanic-Serving Institution in the poorest area of Colorado. Many of our alumni are teachers - an important, but not well-paid profession. I expect many of the other institutions also unlucky enough to have fallen into the "Bottom Ten" category are similar, in that they enroll a greater-than-average proportion of low-income students and students of color.

While a starting teacher's salary of $33,000 may not impress anyone in a metro area or on the East Coast, it is a good one in Colorado's San Luis Valley. Nearly 40% of every Adams State graduating class are the first in their families to complete a higher education. While most cannot expect to earn Fortune 500 salaries, they will earn more than their parents and regional peers who do not attend college, and many will enjoy happier and healthier lives than those without a university degree.